Toward supplier portfolio management theory: An empirical study of buyer-supplier relationships in the United States automotive components industry

This research adds to the developing body of supplier portfolio management literature in several ways. First, this research aims to theoretically ground supplier portfolio management theory within the logical frameworks of transaction cost economic and relational contracting theories. Previous research in the area of supplier portfolio management is primarily practitioner driven and largely maintains a phenomenological rather than theoretical orientation. Second, this study provides an initial large-scale empirical test of the assertions of supplier portfolio management theory by examining the buyer-supplier relationships that exist between a first-tier global automotive components manufacturer and its global direct materials supply base. In particular, this research seeks to empirically validate buyer-supplier closeness as a second-order latent construct, examine the extent to which measures of relationship closeness may be used to identify clusters or sets of supplier relationships within the focal buyer's supply base, assess the differences in relationship closeness across sets of supplier relationships, investigate the factors that influence supplier relationship closeness, and explore the benefits that are derived from close supplier relationships.;Using survey response data from 425 buyer-supplier relationships between a focal automotive components manufacturer and its global direct materials supply base, this study contributes to the growing body of supplier portfolio management literature by testing three models and sixteen hypotheses that center on the investigation of the following research questions: (1) To what extent do buying firms manage clusters or sets of supply relationships within their direct materials supply base? (2) How do suppliers' perceptions of relationship closeness vary across a single buyer's supply base? (3) How do integrative and distributive supply management practices differentially affect suppliers' perceptions of relationship closeness? (4) How do suppliers' perceptions of relationship closeness influence the operational benefits derived from a buyer-supplier relationship?;In the first set of empirical analyses, a progression of confirmatory factor analyses was used to test a second-order factor model of buyer-supplier relationship closeness. In particular, this research advanced a second-order factor model of buyer-supplier relationship closeness that consists of six first-order factors: trust, commitment, information sharing, solidarity, flexibility, and shared benefit. Using a comprehensive validation process, empirical results indicate that relationship closeness is well-represented by a second-order factor model that consists of four first-order factors: trust, information sharing, solidarity, and shared benefit.;In a second set of analyses, the causal relationships amongst strategic importance of the relationship, integrative supply management activity, distributive supply management activity, and relationship closeness were tested. Results from path analysis support the hypothesized positive relationships between strategic importance of the relationship and integrative activity and between integrative activity and relationship closeness. However, the anticipated negative relationships between strategic importance of the relationship and distributive activity and between distributive activity and relationship closeness were not empirically supported. Results from the structural model indicate that there is no relationship between buying firm's use of distributive activity and relationship closeness. Further, contrary to expectations, the path coefficient between strategic importance of the relationship and distributive activity was positive and significant.;Drawing support from relational contracting theory, the causal model of relationship closeness was respecified to include a causal path from integrative activity to distributive activity. Results from model estimation support the notion that buyer's use of integrative and distributive supply management activities are positively related. Further, results from the respecified model indicate that integrative activity fully mediates the positive relationship initially found between strategic importance of the relationship and distributive activity.;In the final set of analyses, the nature and distribution of supplier relationships within the focal automotive components manufacturer's supplier relationship portfolio were explored. (Abstract shortened by UMI.).